Arkansas 2025 Regular Session

Arkansas Senate Bill SB316 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	Stricken language would be deleted from and underlined language would be added to present law.
2	2	JLL240 02/26/2025 12:00:48 PM JLL240
3	3	State of Arkansas 1
4	4	95th General Assembly A Bill 2
5	5	Regular Session, 2025 SENATE BILL 316 3
6	6	4
7	7	By: Senator B. Johnson 5
8	8	By: Representative Beaty Jr. 6
9	9	7
10	10	For An Act To Be Entitled 8
11	11	AN ACT TO AMEND THE SALES AND USE TAX LAWS CONCERNING 9
12	12	REBATES; TO REQUIRE THAT SALES AND USE TAX REBATES BE 10
13	13	ADMINISTERED AS REFUNDS; AND FOR OTHER PURPOSES. 11
14	14	12
15	15	13
16	16	Subtitle 14
17	17	TO AMEND THE SALES AND USE TAX LAWS 15
18	18	CONCERNING REBATES; AND TO REQUIRE THAT 16
19	19	SALES AND USE TAX REBATES BE 17
20	20	ADMINISTERED AS REFUNDS. 18
21	21	19
22	22	BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 20
23	23	21
24	24	SECTION 1. Arkansas Code Title 26, Chapter 52, Subchapter 1, is 22
25	25	amended to add an additional section to read as follows: 23
26	26	26-52-112. Refunds. 24
27	27	Except as otherwise provided by law, a refund provided under this 25
28	28	chapter or the Arkansas Compensating Tax Act of 1949, § 26 -53-101 et seq. 26
29	29	shall be automatically provided to the taxpayer entitled to the refund. 27
30	30	28
31	31	SECTION 2. Arkansas Code § 26 -52-427 is amended to read as follows: 29
32	32	26-52-427. Property purchased for use in performance of construction 30
33	33	contract — Definition. 31
34	34	(a) A contractor that purchases tangible personal property which 32
35	35	becomes a recognizable part of a completed structure or improvement to real 33
36	36	property and which is purchased for use or consumption in the performance of 34
37	37	construction contracts shall be entitled to a rebate on refund of any 35
38	38	additional gross receipts tax or compensating use tax levied by the state or 36 SB316
39	39
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41	41	any city or county if: 1
42	42	(1) The construction contract for which the tangible personal 2
43	43	property was purchased is entered into prior to the effective date of the 3
44	44	levy of the additional state, city, or county gross receipts tax or 4
45	45	compensating use tax; and 5
46	46	(2) The contractor paid the additional gross receipts or 6
47	47	compensating use tax to the seller. 7
48	48	(b) As used in this section, “construction contract” means a contract 8
49	49	to construct, manage, or supervise the construction, erection, or substantial 9
50	50	modification of a building or other improvement or structure affixed to real 10
51	51	property. “Construction contract” shall not mean a contract to produce 11
52	52	tangible personal property. 12
53	53	(c) The rebate refund provided by this section shall apply to tangible 13
54	54	personal property purchased within five (5) years from the effective date of 14
55	55	the levy of the additional state, city, or county gross receipts tax or 15
56	56	compensating use tax. 16
57	57	(d) The rebate refund provided by this section shall not apply to 17
58	58	cost-plus contracts which allow the contractor to pass any additional tax on 18
59	59	to the principal as a part of the contractor's costs. 19
60	60	(e) Interest shall not accrue or be paid on an amount subject to a 20
61	61	claim for rebate pursuant to refund under this section. 21
62	62	(f) The Secretary of the Department of Finance and Administration 22
63	63	shall promulgate rules and prescribe forms for claiming a rebate as provided 23
64	64	by the method of providing a refund under this section. 24
65	65	25
66	66	SECTION 3. Arkansas Code § 26 -52-447(f)-(i), concerning the sales tax 26
67	67	exemption related to the partial replacement and repair of certain machinery 27
68	68	and equipment, are repealed. 28
69	69	(f) A taxpayer may claim the benefit of the tax refund under this 29
70	70	section only by using one (1) of the following methods: 30
71	71	(1)(A) Both: 31
72	72	(i) Obtaining a direct pay or a limited direct pay 32
73	73	sales and use tax permit from the Department of Finance and Administration; 33
74	74	and 34
75	75	(ii) Self-refunding: 35
76	76	(a) At the time the taxpayer files his or her 36 SB316
77	77
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79	79	original sales and use tax report; or 1
80	80	(b) By later filing an amended sales or use 2
81	81	tax report with the department. 3
82	82	(B) The statutes of limitation stated in § 26 -18-306 apply 4
83	83	to claims made under this subdivision (f)(1). 5
84	84	(C) Interest shall not accrue or be paid on a refund 6
85	85	claimed under this subdivision (f)(1); or 7
86	86	(2)(A) Beginning July 1, 2018, for a taxpayer that does not hold 8
87	87	a direct pay or limited direct pay permit, holds an active Arkansas sales and 9
88	88	use tax permit, and files sales and use tax reports with the department, 10
89	89	filing a claim for a credit or rebate with the department. 11
90	90	(B)(i) The credit or rebate authorized under this 12
91	91	subdivision (f)(2) shall be obtained only by offsetting the amount of the 13
92	92	claimed credit or rebate against the state tax to be remitted with the 14
93	93	taxpayer's sales and use tax reports. 15
94	94	(ii) If the total amount of the credit or rebate 16
95	95	authorized under this subdivision (f)(2) is greater than the amount of the 17
96	96	state tax to be remitted with the taxpayer's sales and use tax reports, the 18
97	97	taxpayer is entitled to a refund of the difference between the amount of the 19
98	98	tax owed and the amount of the credit or rebate authorized under this 20
99	99	subdivision (f)(2). 21
100	100	(C) A taxpayer claiming a credit or rebate under this 22
101	101	subdivision (f)(2) shall electronically file all sales and use tax reports. 23
102	102	(D) A claim for credit or rebate under this subdivision 24
103	103	(f)(2) shall not be paid for a claim filed more than one (1) year following 25
104	104	the date of the qualifying sale or more than one (1) year following the date 26
105	105	of payment, whichever is later. 27
106	106	(E) Interest shall not accrue or be paid on an amount 28
107	107	subject to a claim for a credit or rebate under this subdivision (f)(2). 29
108	108	(g) A claim for a credit or rebate shall not be paid under subdivision 30
109	109	(f)(2) of this section for a sale made before July 1, 2018. 31
110	110	(h) A taxpayer shall not claim the benefit of the refund under this 32
111	111	section by filing a verified claim for refund with the department. 33
112	112	(i) The following provisions of the Arkansas Tax Procedure Act, § 26 -34
113	113	18-101 et seq., apply to claims for a refund under this section: 35
114	114	(1) The time limitations that apply to claims for a refund of an 36 SB316
115	115
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117	117	overpayment of state tax; and 1
118	118	(2) The procedures that apply to the disallowance or proposed 2
119	119	disallowance of claims for a refund. 3
120	120	4
121	121	SECTION 4. Arkansas Code § 26 -52-523(b)-(g), concerning the credit or 5
122	122	rebate on local sales and use tax, are amended to read as follows: 6
123	123	(b)(1) A purchaser that pays any municipal sales or use tax in excess 7
124	124	of the tax due on the first two thousand five hundred dollars ($2,500) of 8
125	125	gross receipts or gross proceeds from the purchase of a travel trailer or 9
126	126	from a qualifying purchase of tangible personal property, specified digital 10
127	127	products, a digital code, or a taxable service in a single transaction is 11
128	128	entitled to a credit or rebate refund of the excess amount of municipal sales 12
129	129	or use tax paid on each single transaction. 13
130	130	(2) A purchaser that pays any county sales or use tax in excess 14
131	131	of the tax due on the first two thousand five hundred dollars ($2,500) of 15
132	132	gross receipts or gross proceeds from the purchase of a travel trailer or 16
133	133	from a qualifying purchase of tangible personal property, specified digital 17
134	134	products, a digital code, or a taxable service in a single transaction is 18
135	135	entitled to a credit or rebate refund of the excess amount of county sales or 19
136	136	use tax paid on each single transaction. 20
137	137	(c)(1) A purchaser that is required by § 26 -52-501, § 26-52-509, or § 21
138	138	26-53-125 to file a sales or use tax return may file a claim for a credit or 22
139	139	rebate refund under this section with the Secretary of the Department of 23
140	140	Finance and Administration in connection with the sales or use tax return and 24
141	141	offset the amount of credit or rebate refund claimed against any municipal or 25
142	142	county sales or use tax due to be remitted with the return. 26
143	143	(2) A The secretary shall automatically issue a refund to a 27
144	144	purchaser that qualifies for a credit or rebate refund under this section and 28
145	145	is not required to file a sales or use tax return as provided in subdivision 29
146	146	(c)(1) of this section may file a claim for a credit or rebate under this 30
147	147	section with the secretary . 31
148	148	(3) If a rebate refund would be due under this section as a 32
149	149	result of the purchase of a travel trailer and if the gross receipts or 33
150	150	compensating use tax on the travel trailer is collected directly from the 34
151	151	purchaser by the Department of Finance and Administration under § 26 -52-510 35
152	152	or § 26-53-126, then the department shall collect only the amount of tax due 36 SB316
153	153
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155	155	less the amount to which the purchaser would be entitled under the rebate 1
156	156	refund provisions of this section. 2
157	157	(d) A credit or rebate under this section shall not be paid for a 3
158	158	claim filed more than one (1) year following the date of the qualifying 4
159	159	purchase or more than one (1) year following the date of payment, if later. 5
160	160	(e) A claim for a credit or rebate under this section shall be filed 6
161	161	with the local taxing jurisdiction if, at the time the claim is filed, the 7
162	162	local sales or use tax that is the subject of the claim has been out of 8
163	163	existence for more than sixty (60) days. 9
164	164	(f) No interest shall accrue or be paid on an amount subject to a 10
165	165	claim for a credit or rebate refund under this section. 11
166	166	(g)(e) The secretary may promulgate rules to administer this section, 12
167	167	including without limitation providing an administratively feasible method 13
168	168	for filing a claim for a credit or rebate providing refunds and any necessary 14
169	169	forms. 15
170	170	16
171	171	SECTION 5. Arkansas Code § 26 -53-138 is amended to read as follows: 17
172	172	26-53-138. Exemption for property purchased for use in performance of 18
173	173	construction contract — Definition. 19
174	174	(a) A contractor that purchases tangible personal property which 20
175	175	becomes a recognizable part of a completed structure or improvement to real 21
176	176	property and which is purchased for use or consumption in the performance of 22
177	177	construction contracts shall be entitled to a rebate on refund of any 23
178	178	additional gross receipts tax or compensating use tax levied by the state or 24
179	179	any city or county if: 25
180	180	(1) The construction contract for which the tangible personal 26
181	181	property was purchased is entered into prior to the effective date of the 27
182	182	levy of the additional state, city, or county gross receipts tax or 28
183	183	compensating use tax; and 29
184	184	(2) The contractor paid the additional gross receipts or 30
185	185	compensating use tax to the seller. 31
186	186	(b) As used in this section, “construction contract” means a contract 32
187	187	to construct, manage, or supervise the construction, erection, or substantial 33
188	188	modification of a building or other improvement or structure affixed to real 34
189	189	property. “Construction contract” shall not mean a contract to produce 35
190	190	tangible personal property. 36 SB316
191	191
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193	193	(c) The rebate refund provided by this section shall apply to tangible 1
194	194	personal property purchased within five (5) years from the effective date of 2
195	195	the levy of the additional state, city, or county gross receipts tax or 3
196	196	compensating use tax. 4
197	197	(d) The rebate refund provided by this section shall not apply to 5
198	198	cost-plus contracts which allow the contractor to pass any additional tax on 6
199	199	to the principal as a part of the contractor's costs. 7
200	200	(e) Interest shall not accrue or be paid on an amount subject to a 8
201	201	claim for rebate pursuant to refund under this section. 9
202	202	(f) The Secretary of the Department of Finance and Administration 10
203	203	shall promulgate rules and prescribe forms for claiming a rebate as provided 11
204	204	by the method of providing a refund under this section. 12
205	205	13
206	206	SECTION 6. Arkansas Code § 26 -53-149(f)-(i), concerning the use tax 14
207	207	exemption related to the partial replacement and repair of certain machinery 15
208	208	and equipment, are repealed. 16
209	209	(f) A taxpayer may claim the benefit of the tax refund under this 17
210	210	section only by using one (1) of the following methods: 18
211	211	(1)(A) Both: 19
212	212	(i) Obtaining a direct pay or a limited direct pay 20
213	213	sales and use tax permit from the Department of Finance and Administration; 21
214	214	and 22
215	215	(ii) Self-refunding: 23
216	216	(a) At the time the taxpayer files his or her 24
217	217	original sales and use tax report; or 25
218	218	(b) By later filing an amended sales or use 26
219	219	tax report with the department. 27
220	220	(B) The statutes of limitation stated in § 26 -18-306 apply 28
221	221	to claims made under this subdivision (f)(1). 29
222	222	(C) Interest shall not accrue or be paid on a refund 30
223	223	claimed under this subdivision (f)(1); or 31
224	224	(2)(A) Beginning July 1, 2018, for a taxpayer that does not hold 32
225	225	a direct pay or limited direct pay permit, holds an active Arkansas sales and 33
226	226	use tax permit, and files sales and use tax reports with the department, 34
227	227	filing a claim for the credit or rebate with the department. 35
228	228	(B)(i) The credit or rebate authorized under this 36 SB316
229	229
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231	231	subdivision (f)(2) shall be obtained only by offsetting the amount of the 1
232	232	claimed credit or rebate against the state tax to be remitted with the 2
233	233	taxpayer's sales and use tax reports. 3
234	234	(ii) If the total amount of the credit or rebate 4
235	235	authorized under this subdivision (f)(2) is greater than the amount of the 5
236	236	state tax to be remitted with the taxpayer's sales and use tax reports, the 6
237	237	taxpayer is entitled to a refund of the difference between the amount of the 7
238	238	tax owed and the amount of the credit or rebate authorized under this 8
239	239	subdivision (f)(2). 9
240	240	(C) A taxpayer claiming a credit or rebate under this 10
241	241	subdivision (f)(2) shall electronically file all sales and use tax reports. 11
242	242	(D) A claim for credit or rebate under this subdivision 12
243	243	(f)(2) shall not be paid for a claim filed more than one (1) year following 13
244	244	the date of the qualifying purchase or more than one (1) year following the 14
245	245	date of payment, whichever is later. 15
246	246	(E) Interest shall not accrue or be paid on an amount 16
247	247	subject to a claim for a credit or rebate under this subdivision (f)(2). 17
248	248	(g) A claim for a credit or rebate shall not be paid under subdivision 18
249	249	(f)(2) of this section for a purchase made before July 1, 2018. 19
250	250	(h) A taxpayer shall not claim the benefit of the refund under this 20
251	251	section by filing a verified claim for refund with the department. 21
252	252	(i) The following provisions of the Arkansas Tax Procedure Act, § 26 -22
253	253	18-101 et seq., apply to claims for a refund under this section: 23
254	254	(1) The time limitations that apply to claims for a refund of an 24
255	255	overpayment of state tax; and 25
256	256	(2) The procedures that apply to the disallowance or proposed 26
257	257	disallowance of claims for a refund. 27
258	258	28
259	259	SECTION 7. EFFECTIVE DATE. Sections 1-6 of this act are effective on 29
260	260	the first day of the calendar quarter following the effective date of this 30
261	261	act. 31
262	262	32
263	263	33
264	264	34
265	265	35
266	266	36